A global study conducted by Margot Faraci, a senior executive, global leadership expert, and prominent senior leader with over 20 years’ experience, reveals that fear is causing a £2.2 billion loss in productivity and performance across firms in the UK.

Faraci’s study of 2,500 emerging managers across the UK, Australia, and US, revealed that one in four UK managers inadvertently lead with fear, resulting in the significant company loss across productivity and performance, while also creating psychologically unsafe work environments.

The findings also revealed that 69% of fearful leaders in the UK firmly believe stress can be positively harnessed in workplaces and a staggering 87% regularly witness declines in team productivity due to toxic leadership. 

Fearful leadership is often overlooked in P&L calculations despite its substantial impact on company performance. It manifests in various forms such as avoidance, complacency, micromanagement, and reluctance to provide feedback.

The impact of fear-driven leadership extends beyond financial losses, affecting team turnover, sales, productivity, and employee wellbeing.

By integrating fear assessment into the P&L, leaders can identify and address toxic leadership behaviours in real time, fostering psychologically safe work environments, and enhancing productivity.

“We see this all the time with the gender pay gap and it’s not getting any better. It’s time we looked at fear also. Leaders shouldn’t wait for a ‘gotcha’ moment. For example, a public report or an employee raising an issue. That’s a fear response at the expense of the thousands of workers suffering with 30–40% less pay than their male counterparts. Fearful leaders won’t admit there’s a mistake or a problem, they’ll just hope they don’t get caught. At best, it’s avoidance and at worst it’s discrimination,” commented Faraci.

“Instead, a love leadership response is to get curious, find out if you have a gender pay gap, decide how to solve it, and communicate that to all your people, explaining how and why. I work with CEOs who have actively done that. I’ve done it.”

“Fearful leadership manifests in subtle yet corrosive ways in our daily interactions. It's reflected in overly controlling management styles, where leaders micromanage every aspect, stifling creativity, and autonomy. It's evident in a reluctance to communicate transparently, often leading to rumours and misinterpretations. Fearful leaders might prioritise short-term gains over long-term employee well-being, inadvertently fostering a tense and anxious work environment. These actions stem from an unconscious fear of losing control.” 

"Fearful leadership isn’t just about aggressive behaviour; it’s deeply ingrained in our subconscious and often stems from inexperience and low self-confidence," says Faraci, emphasising the need for businesses to recognise and address fear-driven leadership patterns.

Faraci is urging businesses, ahead of the gender pay gap deadline to prioritise creating psychologically safe work environments by reporting on and mitigating fear-driven leadership behaviours, ultimately improving both financial performance and employee wellbeing.